Saturday, April 13, 2013

Tanzania Banks to adopt Cheque Truncation Systems

BANKS operating in Tanzania have welcomed the newly introduced Cheque Truncation System (CTS) saying that, the technology would ease their daily banking activities. The system to be introduced for the first time in the country will be made workable by IT experts in the banks by help of South African Sybrin Systems Company. It has been learnt. Considered to be a major milestone in the history of Tanzania banking sector, the introduction of the CTS System aims to make cheque clearance more efficient and reduce their clearance time to one day, thereby trimming down the floating time considerably.  Speaking in an exclusive interview last week in Dar es Salaam, bank experts and other stakeholders have said that, the newly introduced technological mechanism would help their customers have their cheques cleared quickly to less than a day instead of five or six days as it is now. The system which is scheduled to commence effectively in September this year as per the Central Bank of Tanzania (BOT) proposal, will enforce all banks operating in the country to be linked in a single digital network to ensure its smooth operation. An official from the Tanzania Bankers’ Association who spoke on condition of anonymity said that, the newly introduced system would help relieve banks with burdens as it would effectively eliminate the associated cost of movement of the physical cheques, reduces the time required for their collection and brings elegance to the entire activity of processing. Unlike at the moment, he further noted that the current systems involves vast amount of unnecessary manual labour of the cheques presented for payments at the banks that takes long days to be cleared. However, he added that under the new technology the process will be quickened by the clearing house. Detailing the need of his firm’s commitment for the introduced technological system to be soon made workable in Tanzania, the Sales Manager of the Sybrin Systems Daniel Parreira said that, cheque truncation solution involves replacing the physical paper with the electronic image at the bank’s branch where it was first presented. According to him, CTS is basically an online image-based cheque clearing system where cheque images and data are captured at the collecting bank branch and transmitted electronically to another bank branch thus eliminating the actual cheque movement. He further noted that, under the system, the process of cheques’ collection would result in better service to customers, reduces the scope for clearing-related frauds or theft and loss of instruments in transit, lowers the cost of collection of cheques, and removes reconciliation-related and logistics-related problems, thus benefitting the system as a whole.  “The firm has handled the implementation of similar systems and has 12 years’ experience in this field in many banks across Africa having implemented the first cheque truncation solution in Malawi, Zambia, Kenya and Botswana” he said.  He further noted that, his company’s Cheque truncation solution adheres to International standards and more importantly is aligned with East Africa Payment Solution (EAPS) strategy. Sybrin have successfully integrated with other IT firms in other territories and expects no foreseeable issues integrating the same in Tanzania. In view of this, a local registered Tanzanian IT company, Computech-ICS (T) Ltd has partnered with Sybrin systems Ltd after a two months’ search for the firm that has the best solution that suit the country’s market needs for the cheques solutions. The firm’s General Manager Parag Patil confirmed in an exclusive interview recently in Dar es Salaam during the one day show seminar which was organized by South Africa based Sybrin company that, his company was satisfied with the banking solutions that works for the betterment of the country’s economy. The seminar which brought together some operation officers of some banks in the country, had commended the use of cheque truncation in their operations as the solution is healthier for banks and customers alike. Interviewed participants were quoted as saying that, the solution cuts risks, time and costs which at the end of the day relieves banking operations. They have noted that the system would eliminate the cumbersome physical presentation of the cheque to the paying bank, thus saving in time and costs involved in traditional clearing system.  The CTS is expected to improve operational efficiency of the entire banking system, resulting in better customer service, improved liquidity position for banks’ customers and safe and secure banking for the entire banking public.



I am of the view that several pieces of legislation require amendments at the same time new ones need to be enacted in order to create a conducive legal sphere for the carry out of cheque truncation in Tanzania.

Jade Graham said...

getting cash for 10 cheques worth $1,500 each. But, you can't put a single cheque worth more than $1,500 directly into your own bank account. order cheque

Gideon Samwel said...

cheque truncation needs to be adhered by Tanzania laws and organs responsible on regulating Banking activities such as the BOT,TISS which should be responsible on the enforcement of cheque truncation in all spheres